Omega Tire Co.’s perpetual inventory records indicate that $2,574,900 of merchan

ID: 2559256 • Letter: O

Question

Omega Tire Co.’s perpetual inventory records indicate that $2,574,900 of merchandise should be on hand on August 31, 2018. The physical inventory indicates that $2,526,600 of merchandise is actually on hand.

Journalize the adjusting entry for the inventory shrinkage for Omega Tire Co. for the year ended August 31. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTSOmega Tire Co.General Ledger

ASSETS

110

Cash

120

Accounts Receivable

125

Notes Receivable

130

Inventory

131

Estimated Returns Inventory

140

Office Supplies

141

Store Supplies

142

Prepaid Insurance

180

Land

192

Store Equipment

193

Accumulated Depreciation-Store Equipment

194

Office Equipment

195

Accumulated Depreciation-Office Equipment

LIABILITIES

210

Accounts Payable

218

Salaries Payable

219

Customer Refunds Payable

221

Notes Payable

EQUITY

310

Common Stock

311

Retained Earnings

312

Dividends

313

Income Summary

REVENUE

410

Sales

610

Interest Revenue

EXPENSES

510

Cost of Goods Sold

521

Delivery Expense

522

Advertising Expense

524

Depreciation Expense-Store Equipment

525

Depreciation Expense-Office Equipment

526

Salaries Expense

531

Rent Expense

533

Insurance Expense

534

Store Supplies Expense

535

Office Supplies Expense

536

Credit Card Expense

539

Miscellaneous Expense

710

Interest Expense

Journalize the adjusting entry for the inventory shrinkage for Omega Tire Co. for the year ended August 31. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

ACCOUNTING EQUATION

DATE

DESCRIPTION

POST. REF.

DEBIT

CREDIT

ASSETS

LIABILITIES

EQUITY

Adjusting Entries